202 Hira Enclave, Nabha, Punjab 147201
+91 99140-14949[email protected]
Code on Wages, 2019 / EPF & MP Act, 1952 / ESI Act, 1948 / the corresponding section of the Income-tax Act, 2025 (formerly Section 192 of Income-tax Act, 1961)

Payroll & Labor Compliance

Comprehensive payroll auditing, biometric attendance reconciliation, and statutory labor law compliance reviews covering EPF, ESIC, Gratuity, Bonus, and salary TDS withholdings under the corresponding section of the Income-tax Act, 2025 (formerly Section 192 of the Income-tax Act, 1961).

CA Due Diligence
Official Portal Filing
State Stamp Advisory
Payroll & Labor Compliance Statutory Advisory
Statutory Filing
MCA & Tax Practice
Relevant RegulatorMinistry of Labour and Employment (MoLE) & Central Board of Direct Taxes (CBDT), Ministry of Finance

shramsuvidha.gov.in

External link to the official website of the relevant authority. H A V N & COMPANY is not affiliated with any government authority.

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STATUTORY OVERVIEW

Payroll Auditing, Labor Law Assurance & Employee Benefit Verifications

Managing employee remuneration in India demands rigorous operational accuracy and absolute adherence to an intricate matrix of central and state labor statutes, social security enactments, and direct tax withholding codes under the Income-tax Act, 2025 (and Income-tax Act, 1961). Payroll calculation errors, unauthorized compensation disbursements, untracked leave encashments, or delayed statutory remittances expose management and company directors to severe financial penalties, compounding interest, and labor commissioner inspections. Our Payroll and Labor Compliance Audit practice delivers exhaustive verification of gross-to-net payroll registers, employee benefit trusts, biometric attendance logs, and statutory withholdings.

Statutory & Practice Summary • At-A-Glance
ICAI UDIN Authentication Mandate
Governing Framework

Code on Wages, 2019 / EPF & MP Act, 1952 / ESI Act, 1948 / the corresponding section of the Income-tax Act, 2025 (formerly Section 192 of Income-tax Act, 1961)

Regulatory Authority

Ministry of Labour and Employment (MoLE) & Central Board of Direct Taxes (CBDT), Ministry of Finance

Professional Assurance

Chartered Accountants Attestation under ICAI Standards & Code of Ethics

DOCUMENTATION MATRIX

Mandatory Documents Checklist

Self-attested scanned copies required
1. Promoters / Partners / Directors KYC
  • ✓Monthly Gross-to-Net Payroll Registers and Bank Payout Advice Sheets
  • ✓Biometric Time-Attendance Sheets, Shift Rosters & Leave Ledgers
  • ✓Electronic Challan-cum-Return (ECR) for EPF filed on epfindia.gov.in
  • ✓Monthly ESIC Contribution Challans & Contribution History filed on esic.gov.in
2. Registered Office & Premises Proof
  • ✓Quarterly Salary TDS Returns (Form 24Q) & Annexure II Details
  • ✓Employee Investment Declaration Records & Form 12BB Proofs Submitted
  • ✓Gratuity and Leave Encashment Actuarial Valuation Reports under Ind AS 19 / AS 15
  • ✓Bonus Calculation Sheets (Allocable Surplus Form A, B, C) under Bonus Act
PROCEDURAL ROADMAP

Step-by-Step Filing & Approval Process

Structured execution roadmap managed by our Chartered Accountants from pre-filing due diligence to certificate allotment.

01Standard

Master Data & Policy Scoping

Review of employment contracts, CTC structures, HR policies, wage components, and executive compensation approvals.

02Standard

Biometric & Register Audit

Reconciliation of biometric punch-in logs with paid days, unpaid leaves, overtime accruals, and bank disbursement files.

03Standard

Statutory & Tax Withholding Verification

Audit of EPF, ESIC, PT, LWF remittances and salary TDS deductions under the corresponding section of the Income-tax Act, 2025 (formerly Section 192).

04Standard

Executive Audit Report & Rectification

Issuance of certified payroll compliance review report detailing leakage points, statutory liabilities, and corrective actions.

Gross-to-Net Salary Reconciliations & Ghost Worker Audits

Practice Scope & Statutory Guidance

We audit salary registers, incentive and commission structures, overtime calculations, leave without pay (LWP) deductions, and separation/severance packages against approved employment agreements and corporate HR policies. By cross-reconciling active biometric access logs, ERP master data, and electronic bank disbursement sheets, our audit completely eliminates the risk of ghost employees and unauthorized payroll leakage.

Statutory Deductions: EPF, ESIC, Bonus & Gratuity Compliance

Practice Scope & Statutory Guidance

Our team evaluates timely deduction and electronic deposit of Employees' Provident Fund (EPF) under the EPF & MP Act, 1952 and Employees' State Insurance (ESIC) under the ESI Act, 1948, wage ceiling applicability, state-specific Professional Tax (PT), and Labour Welfare Fund (LWF). We audit compliance with the Payment of Bonus Act, 1965 (allocable surplus and set-on/set-off calculations) and the Payment of Gratuity Act, 1972, benchmarking transitional payroll definitions against the Code on Wages, 2019.

Salary TDS Withholding under Section 192 (1961 Act)

Practice Scope & Statutory Guidance

Under the corresponding section of the Income-tax Act, 2025 (formerly Section 192 of the Income-tax Act, 1961), employers are legally obligated to deduct tax at source on estimated taxable employee income. We audit employee investment declarations, verify original documentary proofs submitted in Form 12BB (HRA rent agreements, home loan interest certificates, Chapter VI-A deductions), examine quarterly Form 24Q electronic returns, and reconcile generated Form 16 Part A and Part B certificates with TRACES records.

STATUTORY MATRIX

Statutory Provisions & Regulatory Comparative Matrix

Comparative analysis of governing sections under the new framework alongside legacy statutory references.

Compliance ObligationNew Enactment / Provision (2025)Legacy Statute / Provision (1961 / Pre-Code)Statutory Portal / Authority
Salary TDS WithholdingThe corresponding section of the Income-tax Act, 2025Section 192 of Income-tax Act, 1961https://www.incometax.gov.in/
Tax Deduction on Non-Salary Payments to EmployeesSection 392 of Income-tax Act, 2025Section 194J / 194C of Income-tax Act, 1961https://www.incometax.gov.in/
Unified Wage Definition & Basic Pay FloorsSection 2(y) of Code on Wages, 2019Section 2(b) of EPF Act, 1952 / Section 2(22) of ESI Acthttps://shramsuvidha.gov.in/
Employees' Provident Fund RemittanceUnified Social Security Code / ECR FilingEmployees' Provident Funds & Misc. Provisions Act, 1952https://www.epfindia.gov.in/
Employees' State Insurance ContributionUnified Social Security Code / ESI Challan PortalEmployees' State Insurance Act, 1948https://www.esic.gov.in/
Actuarial Valuation of Employee BenefitsInd AS 19 / AS 15 (Revised)Accounting Standard 15 (ICAI)https://www.icai.org/
ONGOING GOVERNANCE

Mandatory Post-Registration Compliances

Failing to complete statutory post-incorporation actions carries steep daily penalties. Our CA firm manages continuous compliance:

CompliancePeriodic

Monthly EPF & ESIC E-Challan Deposit

Timely electronic remittance of EPF and ESIC contributions on or before the 15th of each succeeding calendar month.

CompliancePeriodic

Quarterly TDS Return (Form 24Q)

Filing quarterly electronic return of salary tax deductions on incometax.gov.in by the 31st following each quarter-end.

CompliancePeriodic

Annual Form 16 TRACES Generation

Downloading and issuing digitally signed Form 16 Part A and Part B to employees on or before June 15 following the financial year.

CompliancePeriodic

Annual Bonus & Gratuity Settlement

Disbursement of statutory annual bonus within 8 months of financial year close and actuarial balance sheet provisioning under Ind AS 19.

FREQUENTLY ASKED QUESTIONS

Statutory FAQs & Practical Guidance

Frequently asked questions and procedural guidance regarding Payroll & Labor Compliance.

What are the employer TDS obligations under the corresponding section of the Income-tax Act, 2025?
Under the corresponding section of the Income-tax Act, 2025 (formerly Section 192 of the Income-tax Act, 1961), employers must deduct tax at source on average rate basis from salaries exceeding the maximum exemption limit. Employers must verify employee tax declarations submitted with supporting investment proofs in Form 12BB, file quarterly Form 24Q returns on the official Income Tax portal (https://www.incometax.gov.in/), and issue Form 16 Part A and Part B certificates.
How does the Code on Wages, 2019 alter the 50% basic wage rule in payroll audits?
Under Section 2(y) of the Code on Wages, 2019, specified allowances (such as HRA, conveyance, and bonus) exceeding 50% of total remuneration are deemed wages and added back to the basic salary pool for computing statutory social security contributions like EPF and Gratuity. Our audit models your compensation packages to align with this threshold and avert retrospective penalty liabilities.
What is a ghost worker audit and how does it prevent payroll fraud?
A ghost worker audit cross-verifies employee master lists against physical biometric attendance access logs, active enterprise email directory accounts, manager verification rosters, and bank payout records. It detects fictitious profiles, un-terminated ex-employees, and duplicate bank accounts used for unauthorized fund siphoning.
What penalties apply for failure to deposit employee EPF or ESIC contributions on time?
Delay in depositing deducted employee contributions beyond the 15th of the month attracts compensatory interest under Section 7Q and damages up to 100% under Section 14B of the EPF & MP Act, 1952. Furthermore, under Section 36(1)(va) read with Section 43B of the Income-tax Act, 1961 / corresponding provisions of Income-tax Act, 2025, delayed employee contributions are permanently disallowed as business expenses.
STATUTORY ADVISORY DESK • PRACTICE INQUIRIES

Statutory Inquiries & Practice Advisory

Information on Payroll & Labor Compliance is provided for general reference. Office addresses and contact details are listed on the Contact page.

Contact Practice Office+91 99140-14949